Buying and Selling Homes in Hard Times: Stuck in Miami

Athena Kaiman at her Miami-area home. Falling prices are giving her pause about moving to Nashville, Tenn.

We continue our series today profiling buyers and sellers navigating the housing market. See past profiles.

Athena Kaiman is ready to leave the sun and sand of Miami for the country-music culture of Nashville, Tenn. Aside from her favorite musicians, Nashville offers affordable homes, low property taxes and proximity to an important business client.

But Ms. Kaiman, like so many other Americans ready to buy a home, is stuck. The problem isn’t just that banks are demanding a steep down payment. (She and her husband, who own a small book publishing-related company, have saved up enough money for that.) Falling prices are holding them back.

“We’re sitting on the fence, because however much money you have left over, the prices are sinking further and further, and you can’t see the bottom. It’s terrifying,” she says. “I would like to leave, but I am trapped here. I’m kind of heartsick about it.”

Ms. Kaiman lives with her husband and daughter, who is in law school, in a home she bought for $750,000 in 2006 on North Bay Island, which sits in Biscayne Bay between Miami and Miami Beach. She and her husband took out a home-equity loan as a rainy-day fund for their business, and are still saddled with $375,000 in house-related debt, Ms. Kaiman says. Meanwhile, home prices in Miami have fallen by more than half, according to the S&P/Case-Shiller 20-city composite index, to levels not seen since 2003.

When the economy worsened in 2008, Ms. Kaiman says, her bank ended her line of credit, without explaining why, a potential threat to her business. Even though she has a credit score in the 800s, Ms. Kaiman says lenders in Nashville are asking for down payments as high as 50%. Credit standards have tightened, and the couple are considered self-employed since they own their own company.

“I’m self-employed, but I might as well just say I’m unemployed when it comes to a bank,” Ms. Kaiman says.

Still, Ms. Kaiman could be tipped over the edge, she says, with the right incentive. She and her husband missed out on the first-time homebuyer tax credit, but if a lender offered loan incentives, she would consider taking the plunge. That would mean reducing fees and shaving points off of her mortgage, or a lower down payment — incentives that are sometimes offered by new home builders and their in-house mortgage units.

But barring those or another incentive, Ms. Kaiman says she’ll continue to wait until she feels better about the economy, or at least Miami’s housing market, to try and sell her North Bay Island home.

“I could probably do it if I were willing to put myself through it but … I would have to be willing to give up a good chunk of my life savings,” Ms. Kaiman says. “You don’t sleep. You’re in a constant state of agitation. You feel trapped … Where am I supposed to live?”